Union Bank of the Philippines, the country’s ninth-largest lender in terms of assets and controlled by the Aboitiz Group, said net income increased 8 percent in the first half to P4.7 billion from P4.4 billion a year ago.
UnionBank said in a disclosure to the stock exchange Monday net revenues grew 9.1 percent in the six-month period to P12.7 billion from P11.7 billion in the same period last year.
The figures translated into an annualized return on equity and return on average assets of 12.8 percent and 1.6 percent, respectively.
“We are ahead of our target for the year despite margin compression in the first half due to higher interest rates and regulatory compliance,” said UnionBank treasurer and chief financial officer Jose Emmanuel Hilado.
He said for the rest of the year, recurring income was expected to drive profitability. “We anticipate margins to improve as loan rates start to catch up against deposit cost,” he said.
The bank sustained its robust performance from the first quarter given the double-digit growth from customer businesses. Total loans climbed 18 percent year-on-year to P313.0 billion, with retail loans accounting for 33 percent of the total loan portfolio.
This boosted the bank’s total assets to P623.2 billion, up by 12.8 percent from P552.6 billion in the same period last year. Assets were mainly supported by deposits at P452.9 billion.
UnionBank president Edwin Bautista said the bank would launch more innovations in the industry as it aimed to be among the pioneers in the field of blockchain technology and the token economy.
“We have no doubt that we are on track in our digital transformation journey. The market has noticed. The bank was recognized as Asia’s Best Bank Digital Transformation in the 2018 Euromoney Awards for Excellence. Moreover, our Project i2i in collaboration with rural banks was highlighted in the technology space as a commendable use case of blockchain to drive societal change and inclusive prosperity,” he said.
Bautista expressed optimism the bank would be able to continue growing in the succeeding quarters, citing the robust economy that could also benefit the banking industry.
UnionBank has consistently been recognized as one of Asia’s leading companies in banking and finance, ranking among the Philippines’ top 10 universal banks in terms of key performance ratios in profitability, liquidity, solvency, and efficiency.
UnionBank garnered several awards and recognitions including ‘Asia’s Best Bank Transformation’ in the 2018 Euromoney Awards for Excellence.